Lee Soo-man announces legal response to SM, “It is illegal to purchase shares in Kakao SM” (official position)
Lee Soo-man, the largest shareholder of SM Entertainment, expressed his position.
On the 7th, Hwawoo, a law firm, announced its position on SM’s February 7, 2023, as an agent of general producer Lee Soo-man (hereinafter referred to as “SM”), the largest shareholder of SM Entertainment (hereinafter referred to as “SM”).
Lee Sooman said, “As has already been reported through many media, SM is currently in a situation where a management dispute between its largest shareholder, general producer Lee Soo-man, and Alignment Partners, which advocates a shareholder activist fund, has become a reality. Last year, Allin Partners made a shareholder proposal to appoint an auditor at SM’s regular shareholders’ meeting, and since then, it has been in dispute with the largest shareholders through a series of actions such as requesting access to account books and board minutes.
“It is clearly illegal for SM’s board of directors, led by co-CEOs, to issue new shares and convertible bonds to third parties at a time when management disputes are underway,” he said.
“SM’s board of directors wanted to expand its stake in the current management and secure an advantage in the competition for control by unilaterally assigning new shares and convertible bonds to third parties,” he said. “As an agent of the largest shareholder, the law firm will fundamentally block illegal attempts by SM’s board of directors.”
Currently, SM is in a management dispute between Lee Soo-man, the largest shareholder, and Alignment Partners, a shareholder activist fund, and it was reported that Kakao became SM’s second-largest shareholder.